2023

Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

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August 8, 2023

Aspirational CAFE Policy To Disrupt U.S. Auto Market

The Transportation Department plans to boost the CAFE standards to levels that will force the auto industry to only build EVs by 2032. The proposed standards will be impossible for automakers to reach without shifting their entire output to EVs, especially after the mpg of EVs are downgraded. GM’s latest financial results highlight the power and profitability of its ICE vehicle franchise. The EV transition will depend on the successful introduction of price-competitive EVs such as Chevrolet’s Equinox EV being introduced this fall. Examining the challenges impacting this transition includes reviewing the latest Anderson Economic Group’s EV versus ICE vehicle fueling cost study. READ MORE

Aspirational CAFE Policy To Disrupt U.S. Auto Market

Dreamers in the Transportation Department, under the spell of White House social engineers, unveiled a nearly 700-page plan to boost the Corporate Average Fuel Economy (CAFE) standards for U.S. passenger cars, as well as trucks and SUVs. By 2032, the government wants cars to average 66.4 miles per gallon, up from 44.1 mpg set last year. Trucks and SUVs will need to average 54.4 mpg, up from 32.1 mpg.

In an additional debilitating move for the auto industry, the Energy Department is proposing to reduce the “miles per gallon equivalent” for electric vehicles (EV). For example, it would cut the rating for Ford Motor Company’s F-150 Lightning from 237 mpg-e to only 67. This means even more EVs will need to be sold if the auto companies are to avoid penalties for failing to meet the government’s CAFE standards.

The EV became the Obama administration’s ‘golden calf’ and was foisted on the public and auto industry as the solution for global warming. Money for EVs was abundant, and with the help of the United Auto Workers union, became the carrot to drive the transportation industry transition. The stick was handed to the bureaucrats in the Energy, Environment, and Transportation Departments to create ‘aspirational’ standards to ensure EVs’ success regardless of the environmental and economic costs.

As Obama’s policymakers began implementing their environmental and energy plans, the domestic automobile and electricity industries were targeted. Remember when Obama told the San Francisco Chronicle in an interview during his 2008 presidential campaign:

“You know, when I was asked earlier about the issue of coal, uh, you know — Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”

The policymakers from Obama’s administration are now alive and well and in control of the Biden administration’s environmental policies. Their bureaucratic supporters control the key enforcement agencies and understand the goals and objectives of these policymakers. Thus, we should not be surprised by what the Editorial Board of The Wall Street Journal called “Biden’s Summer Regulatory Onslaught.”

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